'Charged thousands for mum's nursing home but we shouldn't have paid': Why you'll probably STILL have to sell your house to go into care

Paying for care in old age is many people’s second-biggest expense during their life, after buying a house. The Government’s proposals for how the State should help with care costs were announced last week, but changes will not come into force until 2017.

Until then hundreds of thousands of families must battle with the current complex system. And as Financial Mail explains here with a question and answer session, the proposed changes are less generous than they first appear.

‘Other patients in my mum’s nursing home weren’t paying … it just seemed so unfair’

Have you missed out on financial help to which you were entitled?

As if the care system wasn’t complicated enough, some families are losing out on financial help because their own or their loved ones’ needs have not been properly assessed.

Basic ‘social’ care must be paid for by individuals or their families, but anyone assessed as having a ‘primary health need’ – as opposed to a ‘social care need’ – would normally be treated in hospital by the NHS, free, and is entitled to free care even where this is provided outside of a hospital. In such cases it falls to the person’s local primary care trust (PCT) to foot the bill.

When someone suffers a deterioration or change in their circumstances – for instance, they leave hospital after treatment for a fall – they should be assessed for ongoing care.

These assessments should continue regularly, even when patients are in a home, but often they are not undertaken. Hannah McLuckie of law firm Farley Dwek in Manchester says: ‘Care homes and families are focused most on caring for the person, so the process is sometimes overlooked.’

Paul and Carol Brogdon are among 60,000 families trying to claim costs back from a PCT relating to care they believe should have been paid for Paul’s late mother, Barbara.

Around 2000 Barbara’s health deteriorated and she sold her home and moved into sheltered housing closer to Paul and Carol in Leeds.

Her health worsened and she needed to go into a nursing home. That cost £1,700 a month, which Paul, who had power of attorney, paid out of his mother’s pension.

He says: ‘I was aware there were other patients in the home who were not paying for their care. It did seem unfair that she paid just because she and dad had saved up.’ His mother died in 2009, aged 79.

Paul, 59, a mechanic, was introduced to Farley Dwek through his financial adviser, who spotted there was a chance the costs should have been met by the local trust.

Leeds PCT has now admitted it should have paid for four years’ care and the exact sum is being agreed.

Tough deadlines apply to the reclaiming of such costs and expert help is needed. The March 31, 2013 deadline for claiming back nursing or care home fees wrongly imposed by health authorities applies to periods of care from April 1, 2011 to March 31, 2012.

A frail woman (or
man) with a property worth £250,000 but little savings goes into a home
costing £800 a week. Under today’s regime, who pays?

The chances are she will foot the entire
bill for her care – and she will have to sell her home to do so. The
only exception is if the need for help is linked to a specific medical
condition when care is then defined as an NHS service and provided free.
But patients’ groups report that many people struggle to get their
needs classified as health related.

For straightforward care there is no national system, and town halls vary in what they offer. The woman in our example must first be assessed to see whether her needs are ‘low’, ‘moderate’, ‘substantial’ or ‘critical’.

Increasingly, local authorities help only those in the last two categories.

Next is the ‘financial test’ where total assets including her home must be below £23,250. She will continue contributing to costs on a sliding scale until her assets drop to £14,250, after which she need pay nothing. So in this case the woman would pay the full costs of her care for almost six years before the local authority helped.

Although £800 a week is a realistic average for much of England, care home costs vary.

Local authorities can apply a limit. So even if our fictitious woman reached the point where her assets totalled less than £14,250, her family may be chipping in if her care home’s fees exceed the local rate.

So what would happen if her money ran out and her family couldn’t afford to help? These circumstances are distressingly common. The local authority normally negotiates with the care home, which might involve moving the patient to a cheaper room. It is mercifully rare for patients to be moved to a different home.

The same woman goes into the same home after 2017. Who pays then?

There are two big changes. First, help will be available once total assets fall below £123,000. That is the good news, giving rise to the Government’s claim that families will be able to retain and bequeath more of their wealth.

But the bad news is she will get help only after spending £75,000 –the lifetime ‘care cap’ referred to by the Government. And here is the catch. She will have to spend far more than £75,000 to reach this cap because many costs don’t count.

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For instance, say the £800-a-week nursing home is in a local authority where the maximum it will contribute is £500.

Now assume the woman’s total bill is broken down into roughly half spent on care (help with dressing, meals, using the toilet and so on) and half spent on living (food, accommodation and heating).

Only the former costs will count toward the cap. So of her £800 weekly outlay only about £250 is ‘on the meter’ – meaning she would have to stay for almost 300 weeks (nearly six years) in the home before reaching the £75,000 cap.

If she was richer, she would have spent about £240,000 before reaching this cap. But in our example her home is worth £250,000 so she will be helped to some extent after she has spent £127,000 of her wealth down to the £123,000 threshold.

Even then, however, the new system is not that generous. The help again applies on a sliding scale until the lower threshold of £17,500 is reached. Only when assets dwindle to this level would she not have to pay anything. And in this woman’s case, because her home costs £800 a week rather than her local authority’s maximum £500, she will still have to find £300 a week.

Surely many people will still have to sell their homes to pay for care?

Yes, it seems so. The Government hopes the £75,000 cap will make it easier for families to plan and for banks and insurers to offer schemes that can plug the gap. These could be insurance policies, or loans secured against properties, or a mix. They are expected to take years to develop.

In the meantime, families will continue to struggle with varying rules and means tests. Financial advisers are becoming increasingly expert in the field of care cost provision and specialist firms, such as Partnership, offer annuity-type policies that convert lump sums into regular payments to care homes.

Partnership director Chris Horlick says: ‘It is more important than ever that people understand how the system works, seek advice and plan.’